Group 1: RVO Settings and Overall Trends - The 2026 - 2027 RFS final rule unifies the RVO measurement of BBD from "physical gallons" to "RINs", aligning with other fuel categories and simplifying compliance [1][2] - The total RVO in 2026 - 2027 reaches 26.81 and 27.02 billion RIN respectively, with an increase of over 20% compared to 2025, mainly driven by biomass - based diesel and advanced biofuels [2][3] - Cellulose biofuel RVO shows steady growth, reaching 1.36 and 1.43 billion RIN in 2026 - 2027 from 1.21 billion RIN in 2025, but faces terminal demand constraints [3] - The basic RVO of corn ethanol remains stable at 15 billion gallons, reducing the impact on the grain market [3] - The 70% re - distribution of SRE quotas from 2023 - 2025 to 2026 - 2027 is finalized, filling the compliance gap and stabilizing the RIN market [4][14] Group 2: Biomass - Based Diesel Analysis - In 2026, 9.07 billion RIN of biomass - based diesel is equivalent to 5.5 billion gallons, and in 2027, 9.2 billion RIN is equivalent to 6.1 billion gallons, meeting market expectations [2][5][6] - The production of biodiesel and renewable diesel is expected to be 40.7 billion gallons in 2025, 49.9 billion gallons in 2026, and 58.9 billion gallons in 2027. EIA may adjust the balance sheet [6] - The biomass - based diesel volume will increase by 35.1% in 2026 compared to 2025 and 10.9% in 2027 compared to 2026 [6] - North American raw materials (US soybean oil, Canadian canola oil, Mexican UCO) will benefit from the 45Z tax credit policy, while non - North American raw materials will be excluded from the US market [7] - The 45Z tax credit creates price differences between different raw materials. The EPA expects the supply of US soybean oil to meet the growing demand through various means, and the development of US biodiesel will drive global vegetable oil demand [8][9] - The EPA estimates that the price of US soybean oil will be 66 - 68 cents/lb in 2026 - 2027, with a risk of rising to 86 - 90 cents/lb in a high - price scenario [9] Group 3: Policy Adjustments - The EPA delays the effective date of the new equivalent values for renewable diesel, renewable jet fuel, and renewable naphtha to January 1, 2027 [10][11] - The Import RIN Reduction (IRR) policy is postponed to 2028 and later to avoid market supply shocks and rising refined oil prices, which is expected to benefit trade and raw material demand in the US, Canada, and Mexico [12] - Renewable electricity (eRINs) is removed from the list of eligible renewable fuels in the RFS program to strengthen the core position of liquid biofuels [13] - RIN generation rules are tightened, requiring a strict link between RIN generation and transportation use and adding importer joint - liability clauses [15]

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - Palm oil prices are continuously affected by oil price fluctuations and are operating in a high - level volatile range; soybean oil shows a situation where the driving force of the soybean series is not significant, and the positive effects of RVO have been fully realized [1] 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **Futures Prices**: Palm oil's day - session closing price was 9,768 yuan/ton with a 1.60% increase, and night - session was 9,692 yuan/ton with a - 0.78% decrease; soybean oil's day - session closing price was 8,688 yuan/ton with a 0.49% increase, and night - session was 8,648 yuan/ton with a - 0.46% decrease; rapeseed oil's day - session closing price was 9,877 yuan/ton with a 0.38% increase, and night - session was 9,762 yuan/ton with a - 1.16% decrease. The closing price of Malaysian palm oil was 4,630 ringgit/ton with a 1.03% increase, and CBOT soybean oil was 67.22 cents/pound with a - 1.18% decrease [2] - **Trading Volume and Open Interest**: Palm oil's trading volume was 348,165 lots with an increase of 26,169 lots, and open interest was 288,414 lots with an increase of 8,470 lots; soybean oil's trading volume was 201,453 lots with an increase of 15,480 lots, and open interest was 537,668 lots with a decrease of 7,724 lots; rapeseed oil's trading volume was 147,326 lots with a decrease of 14,319 lots, and open interest was 213,002 lots with a decrease of 5,414 lots [2] - **Spot Prices**: The spot price of 24 - degree palm oil in Guangdong was 9,650 yuan/ton with no change; the spot price of first - grade soybean oil in Guangdong was 9,020 yuan/ton with no change; the spot price of fourth - grade imported rapeseed oil in Guangxi was 10,150 yuan/ton with no change; the FOB price of Malaysian palm oil was 1,185 dollars/ton with a 10 - unit increase [2] - **Basis and Spreads**: The basis of palm oil in Guangdong was - 118 yuan/ton; the basis of soybean oil in Guangdong was 332 yuan/ton; the basis of rapeseed oil in Guangxi was 273 yuan/ton. The spread between rapeseed oil and palm oil futures was 109 yuan/ton (previously 226 yuan/ton), the spread between soybean oil and palm oil futures was - 1,080 yuan/ton (previously - 968 yuan/ton), the 5 - 9 spread of palm oil was 44 yuan/ton, the 5 - 9 spread of soybean oil was 58 yuan/ton, and the 5 - 9 spread of rapeseed oil was 97 yuan/ton (previously 102 yuan/ton) [2] 3.2 Macro and Industry News - The EPA has finalized the renewable fuel blending obligations for 2026 and 2027, which are the highest in the program's history. The total renewable fuel obligation in 2026 is 25.82 billion RINs, and in 2027 is 25.98 billion RINs [3] - Malaysia, a major palm oil exporter, is taking measures to ensure fertilizer supply due to the increase in fertilizer prices and domestic supply shortage caused by the Middle East conflict [4] - The Rural Economics Institute of Paraná, Brazil (Deral) expects the soybean crop yield in the state in the 2025/26 season to be 21.89 million tons, lower than the February estimate of 22.12 million tons [4] - The actual soybean crushing volume of domestic oil mills in the 13th week of 2026 (March 21 - 27) was 1.8352 million tons, 0.1553 million tons less than the previous week and 0.1021 million tons lower than the estimated volume, with an actual startup rate of 50.53% [4] - The Iranian Revolutionary Guard launched a devastating drone attack on Israeli military support bases, military transportation centers, and military force assembly areas at Ben - Gurion Airport, which is expected to threaten Israel's supply lines and affect its offensive combat capabilities [5] 3.3 Trend Intensity - The trend intensity of palm oil is 0, and the trend intensity of soybean oil is 0 [6]

Summary of Key Points from Conference Call Records Industry Overview - The conference call discusses the corn industry, particularly focusing on the impact of extreme weather conditions and market dynamics on corn prices and related agricultural companies [1][2]. Core Insights and Arguments 1. **Corn Price Surge**: Corn prices have reached a new high in 2026, driven by supply and demand factors. The price has surpassed 2,400 RMB/ton, with expectations for further increases [2][3]. 2. **Supply Constraints**: - 2025 saw significant reductions in corn production in North China due to extreme weather, including high temperatures and excessive rainfall during harvest, leading to historical challenges [2]. - Import levels have been intentionally controlled, remaining at lower levels compared to historical highs of 20-30 million tons, limiting supply [2]. - Rising costs of agricultural inputs, including fertilizers and pesticides, are expected to further increase production costs for corn [2][3]. 3. **Demand Dynamics**: - The primary demand for corn comes from animal feed and deep processing, with human consumption being minimal [2]. - The demand for feed is projected to grow, particularly due to high levels of pig production, which is expected to increase corn consumption in 2026 compared to 2025 [2][3]. - The industrial use of corn, particularly for ethanol production, is closely tied to rising crude oil prices, which are expected to boost demand for corn-based ethanol [2][3]. Beneficiary Companies Planting Sector 1. **Sukang Agricultural Development**: Benefits from the price increase of both wheat and corn, with a strong correlation between profits and grain prices [4]. 2. **Beidahuang**: Gains from improved planting efficiency and rising land rental prices due to better downstream planting profitability [4]. Seed Sector 1. **Kangnong Seed Industry**: Expected to see significant sales growth in 2026 due to the successful introduction of the "Kangnong 8,009" variety in North China, with a strong correlation between planting profitability and seed pricing [5][6]. 2. **Longping High-Tech**: Maintains a leading position in the corn seed market, with improved performance expected in 2026 due to recovery in its Brazilian operations [6]. Processing Sector 1. **COFCO Technology**: As a leader in fuel ethanol production, the company is well-positioned to benefit from rising crude oil prices, which will likely lead to higher ethanol prices and improved profitability [7]. Additional Insights - The agricultural sector is also seeing potential price increases in other products such as mushrooms, wheat, and rubber, alongside the corn market [7]. - The pig farming sector is expected to face continued pressure due to rising feed costs, which may lead to further capacity reductions [7]. - Consumer-oriented agricultural companies like **Nobility** and **Zhongchong** are highlighted for their growth potential and relatively low valuations, with expectations for performance improvement in the coming years [8]. Recommended Investment Priorities - The recommended investment focus includes: - **Nobility** and **Kangnong Seed Industry** as top picks. - Beneficiaries from the corn industry chain, including Sukang Agricultural Development, Beidahuang, Kangnong Seed Industry, Longping High-Tech, and COFCO Technology [9].

Summary of Conference Call on Corn Market Outlook Industry Overview - The conference call focuses on the corn market, particularly in the context of global and Chinese supply and demand dynamics, pricing trends, and investment opportunities within the corn industry [1][3][5]. Key Points and Arguments Global Corn Supply and Demand - The USDA forecasts global corn production for 2024-2025 at 1.23 billion tons, with an increase of approximately 6 million tons expected for 2025-2026. Despite this increase, demand is also rising significantly, leading to a decrease in the global stock-to-use ratio from 24.8% to 22.38%, indicating tighter supply which may support corn prices [1][3][4]. - The demand for corn is expected to remain robust, particularly due to industrial consumption, including ethanol production, which is anticipated to drive prices higher [3][8]. Chinese Corn Market Dynamics - China's corn market is relatively closed, with major production areas in Northeast and Huang-Huai-Hai regions, contributing approximately 70%-80% of national output. Extreme weather in the Huang-Huai-Hai region in 2025 is expected to severely impact yields, while the Northeast region is expected to maintain sufficient supply [5][6]. - Import policies in China have tightened, reducing imports from historical levels of over 20 million tons to a few million tons, aimed at protecting farmers' interests and ensuring food security [5]. Corn Processing Industry - The profitability of China's corn deep processing industry has been poor in recent years but is expected to improve starting in the second half of 2025. This improvement is attributed to the increased use of lower-quality corn for processing, which enhances operational rates and profit margins for processing companies [6][8]. Wheat and Corn Relationship - There exists a substitution relationship between wheat and corn, where high corn prices may lead to increased use of wheat as a feed alternative. Current weather conditions affecting wheat sowing in the Huang-Huai-Hai region may elevate wheat prices, indirectly influencing corn price trends [7][9]. Future Demand for Feed Grains - Global demand for feed grains is expected to steadily increase, supported by the recovery of pig stocks and expansion in poultry farming. This trend is mirrored in China, where the recovery in pig inventory and growth in poultry farming will bolster feed grain demand, particularly for corn [8]. Investment Opportunities Notable Companies in the Corn Industry 1. **Beidahuang**: Benefits from rising land rental expectations due to increased grain prices. The company has over 10 million acres of land, with 10%-20% allocated for corn cultivation. The dividend rate is close to 4%, with strong backing from the major shareholder [10][11]. 2. **COFCO Technology**: Focuses on corn deep processing, primarily producing corn ethanol. Although profitability has been low before 2025, it is expected to improve with rising corn ethanol prices [10][13]. 3. **Kangnong Seed Industry**: Noted for its high-yield and dense variety, Kangnong 8,009, which has received positive reviews. The company reported a more than 60% year-on-year increase in advance payments in the first three quarters of 2025, indicating strong demand from distributors [10][13]. Impact of Rising Corn Prices - Rising corn prices are expected to enhance farmers' income, which may lead to increased land rental prices and a greater willingness to invest in high-quality seeds and agricultural inputs. Companies that maintain a strategy of selling high-quality, high-priced products are likely to perform well in terms of sales and pricing [11]. Additional Insights - The agricultural team at Guotai Junan holds an optimistic view on the agricultural market for 2026 and plans to continue organizing events to share insights on various agricultural products, including rubber [12].

Core Insights - The rapid development of Brazil's corn ethanol industry has significantly increased the production of corn distillers grains (including DDG and DDGS) [1] Group 1: Corn Production and Ethanol Industry - Brazil, as the world's third-largest corn producer, is projected to reach a corn production of 136 million tons in the 2024/25 season [1] - The country's corn ethanol production is expected to rise from 400 million liters in 2017 to 7.5 billion liters by 2024, with corn consumption for ethanol production increasing from 950,000 tons to 17 million tons during the same period [1] Group 2: Distillers Grains Production and Export - Brazil's production of corn distillers grains is forecasted to grow from 1.2 million tons in the 2019/20 season to 4.2 million tons in the 2024/25 season, representing a 256% increase, with approximately 79% used for domestic consumption [1] - Exports of corn distillers grains, which were minimal from 2017 to 2021, began to expand in 2022, with Brazil exporting 791,000 tons valued at $11.8 million to 21 countries and regions in 2024, with Vietnam being the largest market [1] - Brazil has signed a memorandum of understanding with China to promote the export of corn distillers grains to China by May 2025 [1]

Core Insights - The Brazilian sugar-cane industry is facing significant challenges due to increased competition from corn-based ethanol, leading to a shift in production focus towards sugar even amid low prices [1][9] - Sugar futures have declined by approximately 22% this year, marking the largest annual loss since 2017, with global production expected to exceed consumption by 2.8 million metric tons [3][9] - Brazilian cane millers are projected to produce a record 43 million metric tons of sugar in the upcoming harvest, a 4.6% increase from the previous year, despite the unfavorable market conditions [3][9] Industry Dynamics - The rise of corn ethanol production in Brazil is causing sugar-cane processors to divert more of their crop towards sugar production, as corn-based ethanol is cheaper to produce [5][9] - The share of corn-based ethanol in Brazil's gasoline substitute production is expected to rise from 23% to 32% in the upcoming season, further intensifying competition for sugar-cane processors [5][9] - Analysts indicate that the outlook for record ethanol supplies may lead to lower prices, making sugar production a more favorable option for millers, particularly in São Paulo [6][9] Company Performance - Shares of Raizen, Brazil's largest sugar-cane processor, have decreased by 56% this year, while smaller competitors Jalles Machado SA and Sao Martinho have seen declines of 42% and 37%, respectively [6][9] - Sugar-cane processors have expanded their sugar-making capacity in recent years to capitalize on previous surges in sugar prices, but are now facing a challenging market environment [7][9] - Economists suggest that Brazilian cane millers will have no choice but to increase sugar production in response to the current market dynamics [8][9]

Group 1 - The main contract for late indica rice futures remains unchanged at 2535.00 yuan/ton as of the report date [1] Group 2 - According to foreign media forecasts, U.S. corn net export sales for the 2025/26 marketing year are expected to be between 800,000 to 2,000,000 tons as of the week ending October 16, 2025 [2] - The Brazilian National Association of Grain Exporters (ANEC) anticipates that Brazil's corn exports for October will reach 6.57 million tons, an increase from the previous week's estimate of 6.46 million tons [2] - As of the week ending October 17, the deliverable inventory of corn at CBOT was reported at 15.067 million bushels, a 23.80% increase from the previous week’s 12.17 million bushels, but a 37.27% decrease from the same period last year when it was 24.019 million bushels [2] - The Executive Director of the International Sugar Organization (ISO) stated that U.S. government subsidies to corn growers distort U.S. corn ethanol export prices, impacting market competition [2]

Group 1 - Corn futures are experiencing a decline, with contracts down 2 to 3 ¼ cents at midday, and the national average Cash Corn price is down 3 cents to $3.78 1/2 [1] - The average close for December corn futures has been $4.19, with less than 2 weeks remaining for harvest price discovery for crop insurance [1] Group 2 - A South Korean importer has purchased a total of 67,000 MT of corn in a recent tender [2] - Brazil's corn exports for October are estimated at 6.57 MMT, reflecting a 0.11 MMT increase from previous estimates [2] - Datagro projects Brazilian corn ethanol production to grow between 3-3.5 billion liters (792-925 million gallons) in the 2026/27 period, with an expected increase in ethanol imports in 2025/26 [2] - Current corn prices include Dec 25 Corn at $4.20 (down 3 1/4 cents), Nearby Cash at $3.78 1/2 (down 3 cents), Mar 26 Corn at $4.34 1/4 (down 2 3/4 cents), and May 26 Corn at $4.42 1/2 (down 2 3/4 cents) [2]

Group 1 - Brazil's sugar production has reached the same level as last year, with a total sugar production of 33.52 million tons, an increase of 0.84% year-on-year [2] - The sugarcane crushing volume in Brazil's central-south region was 40.858 million tons, a year-on-year increase of 5.1%, while the sugar production ratio increased to 51.17%, up 3.44% from last year [2] - Ethanol production from sugarcane has decreased, with a total of 2.213 billion liters produced, down 1.5% year-on-year, while corn ethanol production is expected to rise significantly in the coming years [3] Group 2 - Brazil's sugar exports in September were 3.2448 million tons, with an increase in the amount of sugar waiting for shipment at ports to 3.7272 million tons, a 3.3% increase from the previous week [4] - Domestic sugar imports are expected to decrease from October, with September imports reaching around 800,000 tons, the highest this year, but a decline is anticipated in the following months [5] - Current domestic sugar prices are stable, with mainstream quotes ranging from 5,840 to 6,000 yuan per ton, influenced by the arrival prices of sugar from Guangxi [5]

Core Viewpoint - The U.S. Environmental Protection Agency (EPA) has proposed a plan to redistribute the small refinery exemption (SRE) obligations for biofuel blending to larger refineries, offering options of 50% and 100% redistribution, while also seeking public input on other potential ratios [1][2] Group 1: Proposal Details - The EPA's proposal includes a public comment period of 45 days, which is considered crucial by industry officials [1] - The biofuel industry advocates for a full 100% redistribution to maintain demand for products like corn ethanol, while refiners oppose this, citing increased costs [1] - The proposal is seen as a "stalling tactic" by some industry officials, indicating a lack of substantial progress [1] Group 2: Background Information - According to the Renewable Fuel Standard (RFS), refineries are required to blend billions of gallons of biofuels annually or purchase renewable identification numbers (RINs) from compliant entities [1] - Small refineries can apply for SRE exemptions if they demonstrate that blending requirements would cause financial hardship [1] - The EPA cleared over 170 SRE exemption applications from 2016, necessitating a compensation plan for the obligations [2] - The total amount of exemptions from 2023 to 2025 is equivalent to 2.18 billion RINs [2]